HBOS sees underlying profit meeting expectations

SimonKennedy

LONDON (MarketWatch) -- U.K. banking group HBOS Plc
uk:hbos
said Thursday that its underlying earnings per share for the year are set to meet market expectations of 106 pence. This expected outcome is after taking a negative fair value adjustment of 180 million pounds to traded investment securities, representing 3.5 pence a share in underlying earnings. Customer deposit growth and wholesale funding supply during the liquidity crunch has been strong, though a rise in the cost of funding will result in a slightly lower group margin for the year than previously guided. Mortgage lending increased in the second half and HBOS said it expects to have a net lending market share of 17% to 18%. The group's total exposure to subprime has fallen to 430 million pounds from 550 million pounds at the end of August. HBOS said it expects global credit market dislocation to continue in the short-term.

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